There has never been a better time to sell natural and organic foods—once a niche market, it is now totally mainstream. While The Wedge continues to be financially stable, I believe we are not reaching our full potential. The next two years are a critical time for us to invest in growth.
The world of natural and organic foods is growing rapidly. Businesses throughout the food industry are learning what The Wedge and its members have known for decades. People want to feed themselves and their families food that is local, easy to pronounce, free of junk, and delicious.
While I am excited to see growth in any form of natural and organic food consumption, I am concerned that co-ops have not captured a greater share of that growth. In fact, co-ops' share of overall natural and organic sales has declined over the past three years. And last year, while overall sales of natural and organic foods grew by 13–15 percent, overall food co-op sales grew 8–9 percent. And at The Wedge Co-op, our grocery sales growth has been under 2 percent for three of the last four years, despite the rapid growth of the natural and organics segment. Retailers from Trader Joe's to Wal-Mart are capitalizing on the trend of natural and organics and are capturing more of that market. Last year alone, Whole Foods sales grew by $1.6 billion, which is greater than the sales of all NCGA food co-ops combined.
But does it matter? Is growth important? The reality of the market today is that by standing still we move backwards. If we do not invest in updating the store and our offerings, shoppers will choose to shop other places. And given that all our costs go up every year with inflation (from staff wages to energy costs to product costs), if our sales remain flat, we actually make less profit, and the impact we make in the community decreases.
Additionally, we believe the co-op model, and specifically our model at The Wedge, is one that works better for the members/consumers, employees, vendors, and local economy. Money spent at co-ops stays in the local economy at a much greater rate than other grocery stores—38 percent vs. 24 percent, respectively. On average, co-ops pay their employees better and provide more generous benefits than non-co-op groceries. And, co-ops sell a greater percentage of organic and local products than other grocery stores. While many of the other upscale and self-proclaimed natural foods groceries have gotten very good at making flashy signs that say "Organic" or "Local," it is often like a "Where's Waldo" game trying to find real organic or local products. For all of these reasons, we believe now is an essential time to invest in the growth of The Wedge.
What The Wedge Is Doing:
As we have mentioned in the last couple newsletters, we are about to undertake the most significant period of updating and expansion in The Wedge's almost 40-year history. Our remodel of the store is our first comprehensive upgrade since we moved in 16 years ago and will serve to update systems (such as HVAC, roofing, and refrigerators and freezers) and provide new, in-demand services for our shoppers. Consumers can expect the same excellent product selection, fair prices, and great customer service, but in a nicer shopping environment— delivering a better overall experience. In addition to the structural changes at our Lyndale store, we are continually looking at improving our product selection and signage to better serve members. Additionally, we are actively involved in a site search for a new commissary and a second store location, both of which will expand our footprint and makes us better able to serve the growing demand in the market for top quality, local, and organic foods.
What We Ask from Members:
Shop—The single best way you can support The Wedge Co-op is by continuing to shop here. By spending your dollars here, more money stays in the community, more well-paying jobs with benefits are created, and the quality of products stays top notch. You can be assured that the dollars you spend at The Wedge go to small vendors, our employees, local community organizations, and back to members in patronage refunds—NOT to Wall Street or executives making millions of dollars.
Vote—Part of what makes the co-op experience unique is that members get to choose their governance. I strongly encourage everyone to vote in our October elections, either in the store or in person at our annual meeting on Oct. 23. We have elections for our board of directors, WedgeShare recipients, and a couple important by-laws changes. Information about the election begins on page 2.
Invest—The Wedge is offering C shares for the first time ever, as a way for members to invest money in their co-op. At a time when banks are paying almost no interest, an investment in The Wedge offers a good annual dividend. And even more importantly, it is an excellent way to help support The Wedge's growth so we can continue to be one of the best grocery stores and food businesses in America. More details about the C-share program will be shared at the annual meeting and in additional materials coming out soon.
Lastly, I wanted to thank all of you for participating so actively in our most recent member survey. We had over 1,300 responses, and this active feedback we get from the members helps us continue to deliver a world-class shopping experience.